Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
JPMorgan Chase Bank, N.A.Credit Facility
On February 21, 2014, the Company, through its operating partnership, drew down
$100.0 million from its existing credit facility with JPMorgan Chase Bank, N.A.
in connection with the acquisition of the Properties.
A description of the credit facility was included in the Company's Current
Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the
"SEC") on September 27, 2013. Such description is a summary and is qualified in
its entirety by the terms of the credit agreement relating to the credit
facility, which was filed with the SEC as Exhibit 10.20 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 on
November 14, 2013 and is incorporated by reference herein.
Assumed U.S. Bank National Association Mortgage Debt
Four of the Properties are encumbered by existing mortgages (the "Mortgages")
pursuant to a loan agreement and related documents, dated as of March 13, 2007,
by and between four of the SPEs, as borrowers (the "Borrowers"), a subsidiary of
Inland, as guarantor, and Bear Stearns Commercial Mortgage, Inc., as lender
("Bear Stearns"), which was subsequently assigned by Bear Stearns to U.S. Bank
National Association, as trustee,successor-in-interest to Bank of America, N.A.,
as trustee, successor-by-merger to LaSalle Bank National Association, as trustee
for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2007-TOP27 (the "Lender"). In connection with the Company's
acquisition of the equity interests in the Borrowers (the "Acquisition"), the
Company, American Realty Capital Operating Partnership V, L.P., the Company's
operating partnership (the "Operating Partnership") and the Borrowers, entered
into four separate Reaffirmation, Consent to Transactions and Confirmation of
Obligations (the "Assumption Documents") with the Lender and Inland. Pursuant to
the Assumption Documents, the Borrowers confirmed their obligations under the
Mortgages, the Operating Partnership agreed to replace Inland as guarantor (the
"Guarantor Substitution") and the Lender consented to the Acquisition and the
Pursuant to the Assumption Agreements, the Company paid the Lender aggregate
transfer fees of $0.7 million.
The Mortgages have an aggregate original principal balance of $82.3 million.
Each Mortgage bears interest at a stated rate of 5.5%. The Mortgages all provide
for monthly interest payments with all principal outstanding being due on the
maturity date in April 2017. The Mortgages may be prepaid at any time, in whole
or in part, with break costs, if applicable. In the event of a default, the
lender has the right to terminate its obligations under the Mortgages and to
accelerate the payment on any unpaid principal amount of the Mortgages.